NJ gay couples celebrating at tax time, but married status also brings challenges

By STEPHANIE AKIN

Staff Writer |

The Record

Tax time has been described as anxiety-inducing and unnecessarily confusing, and its inescapability has even been equated with death. Now, it’s being pointed to as a reason for celebration — at least by same-sex couples who for the first time can check off the box that says “married” on their 1040s.

Carmine Galasso/staff photographer

Tim Eustace, right, with his husband, Kevin Williams, at their home in Maywood last June, said being able to file as a married couple means they are now recognized as “an American family.”

Tim Eustace and his husband, Kevin, marked the occasion by going out to dinner in downtown Maywood, where they live. Jeff Farlow, 30, of Pine Hill posted his refund on Facebook. And Jeff Gardner, 45, of Hawthorne described a visit to the accountant with this incongruous adjective: “Momentous.”

Sure, filing as a newly married couple entails its own set of headaches, and filing for the first time as a same-sex married couple comes with an assortment of questions. But many said the symbolic significance is worth the hassle — at least this time around.

“It’s another act that points out that the government legally recognizes us as a legitimate couple,” said Charles Cumpston, a retired publishing executive from Fort Lee. “That’s pretty incredible.”

Parallel developments in 2013 — the legalization of same-sex marriage in New Jersey and the federal ruling that couples who wed in states that allow gay marriage can file as married — mean hundreds of New Jersey same-sex couples will be filing as newlyweds.

For many, the status means a huge reduction in paperwork, lower bills for tax preparation and a bigger refund. But the transition hasn’t been completely without its glitches — this is a tax issue, after all.

Some have dealt with setbacks familiar to any married couple, including the realization that they fall in the group that pays the so-called marriage penalty. Married people often begin to pay more than they would if they were single as a couple’s joint income increases, regardless of whether they file jointly or as a married couple filing separately.

Some couples who fall in the opposite category, those who get a bigger refund filing jointly, are working to get reimbursed for past taxes they paid as single filers while they had civil unions or marriages recognized in other states.

And couples who were legally married in one state, but work in a state that doesn’t recognize gay marriage face another challenge: filing separate state tax returns as individuals there, a reminder, they said, of why a nationwide debate is still raging.

But for the most part, North Jersey same-sex families are wrestling with the same mundane issues as their heterosexual married peers wrestle this tax season.

Cumpston, 68, and his husband, Jim Shocody, 70, weren’t expecting a large tax break after their November wedding because they are both retired. So they started to prepare separate paperwork, as they have throughout their 37-year relationship. But Shocody’s accountant pointed out that they would save money on Social Security taxes if they merged their returns.

“It wasn’t big, but it made a difference,” he said.

Eustace, a state assemblyman, said he wasn’t sure yet what his financial benefit will be. He predicted it would be significant, but said the money wasn’t the most important thing.

“The significance is being considered an American family,” he said.

Farlow and his husband, John Bolinger, 27, were so excited when their tax preparation software spat out a report telling them their refund would be $3,000 higher filing jointly that Farlow put a copy on his Facebook page and urged his friends to share it.

“It was amazing,” said Farlow, who was married in October after having a civil union for a year.

The momentousness of the occasion even lessened the pain for some couples who discovered they would take a financial hit.

“It did not benefit us financially, but that really didn’t matter because it’s always been the case that the fight for marriage equality has always been about rights and responsibilities,” said Gardner, an attorney and a Democratic candidate for Passaic County clerk. “It felt great to be a first-class citizen.”

New Jersey has allowed couples with civil unions to file jointly since 2008. But they still had to file separate federal forms as single people, which in many cases almost doubled their tax preparation fees, said Ted Carnevale, a CPA and chief executive officer at Gramkow Carnevale Seifert & Co. in Oradell.

The elimination of that requirement means that the same tax rules apply to married couples claiming all their income in New Jersey, regardless of their sexual orientation. But some couples still have a lot of questions, Carnevale said.

“You could have people who have been life partners together for a long time, and now their tax [situation] has changed dramatically,” he said. “They have been used to being together and filing a certain way.”

Carnevale said some couples are also confused about whether they can file joint federal returns if they have a civil union and aren’t married — they can’t.

He is also urging couples who will see a benefit from filing jointly to refile their last three returns. That option is only available to couples who were married in past tax years in states that allowed it, not to those who had civil unions.

But not every couple has managed a seamless transition to their new tax status, said accountant Phil Goldstein of Goldstein Lieberman & Co.

One pair of longtime clients has been agonizing over the news that their marriage would eliminate one spouse’s $6,000 refund, although it would mean an $11,000 savings for the higher-earning partner, he said.

“The one who made more said, ‘If it’s costing us more to be married than if we were single, I think we should separate,’ ” he said. The couple eventually resolved their differences and decided to stay together.

But, he added, he saw the dispute as another sign of marriage equality: it was a version of an argument he’d seen between dozens of heterosexual couples over the years.

“It doesn’t make a difference if it’s a heterosexual couple or a gay couple,” he said. “Money is money, and people fight over it.”

Tax time has been described as anxiety-inducing and unnecessarily confusing, and its inescapability has even been equated with death. Now, it’s being pointed to as a reason for celebration — at least by same-sex couples who for the first time can check off the box that says “married” on their 1040s.

Tim Eustace and his husband, Kevin, marked the occasion by going out to dinner in downtown Maywood, where they live. Jeff Farlow, 30, of Pine Hill posted his refund on Facebook. And Jeff Gardner, 45, of Hawthorne described a visit to the accountant with this incongruous adjective: “Momentous.”

Sure, filing as a newly married couple entails its own set of headaches, and filing for the first time as a same-sex married couple comes with an assortment of questions. But many said the symbolic significance is worth the hassle — at least this time around.

“It’s another act that points out that the government legally recognizes us as a legitimate couple,” said Charles Cumpston, a retired publishing executive from Fort Lee. “That’s pretty incredible.”

Parallel developments in 2013 — the legalization of same-sex marriage in New Jersey and the federal ruling that couples who wed in states that allow gay marriage can file as married — mean hundreds of New Jersey same-sex couples will be filing as newlyweds.

For many, the status means a huge reduction in paperwork, lower bills for tax preparation and a bigger refund. But the transition hasn’t been completely without its glitches — this is a tax issue, after all.

Some have dealt with setbacks familiar to any married couple, including the realization that they fall in the group that pays the so-called marriage penalty. Married people often begin to pay more than they would if they were single as a couple’s joint income increases, regardless of whether they file jointly or as a married couple filing separately.

Some couples who fall in the opposite category, those who get a bigger refund filing jointly, are working to get reimbursed for past taxes they paid as single filers while they had civil unions or marriages recognized in other states.

And couples who were legally married in one state, but work in a state that doesn’t recognize gay marriage face another challenge: filing separate state tax returns as individuals there, a reminder, they said, of why a nationwide debate is still raging.

But for the most part, North Jersey same-sex families are wrestling with the same mundane issues as their heterosexual married peers wrestle this tax season.

Cumpston, 68, and his husband, Jim Shocody, 70, weren’t expecting a large tax break after their November wedding because they are both retired. So they started to prepare separate paperwork, as they have throughout their 37-year relationship. But Shocody’s accountant pointed out that they would save money on Social Security taxes if they merged their returns.

“It wasn’t big, but it made a difference,” he said.

Eustace, a state assemblyman, said he wasn’t sure yet what his financial benefit will be. He predicted it would be significant, but said the money wasn’t the most important thing.

“The significance is being considered an American family,” he said.

Farlow and his husband, John Bolinger, 27, were so excited when their tax preparation software spat out a report telling them their refund would be $3,000 higher filing jointly that Farlow put a copy on his Facebook page and urged his friends to share it.

“It was amazing,” said Farlow, who was married in October after having a civil union for a year.

The momentousness of the occasion even lessened the pain for some couples who discovered they would take a financial hit.

“It did not benefit us financially, but that really didn’t matter because it’s always been the case that the fight for marriage equality has always been about rights and responsibilities,” said Gardner, an attorney and a Democratic candidate for Passaic County clerk. “It felt great to be a first-class citizen.”

New Jersey has allowed couples with civil unions to file jointly since 2008. But they still had to file separate federal forms as single people, which in many cases almost doubled their tax preparation fees, said Ted Carnevale, a CPA and chief executive officer at Gramkow Carnevale Seifert & Co. in Oradell.

The elimination of that requirement means that the same tax rules apply to married couples claiming all their income in New Jersey, regardless of their sexual orientation. But some couples still have a lot of questions, Carnevale said.

“You could have people who have been life partners together for a long time, and now their tax [situation] has changed dramatically,” he said. “They have been used to being together and filing a certain way.”

Carnevale said some couples are also confused about whether they can file joint federal returns if they have a civil union and aren’t married — they can’t.

He is also urging couples who will see a benefit from filing jointly to refile their last three returns. That option is only available to couples who were married in past tax years in states that allowed it, not to those who had civil unions.

But not every couple has managed a seamless transition to their new tax status, said accountant Phil Goldstein of Goldstein Lieberman & Co.

One pair of longtime clients has been agonizing over the news that their marriage would eliminate one spouse’s $6,000 refund, although it would mean an $11,000 savings for the higher-earning partner, he said.

“The one who made more said, ‘If it’s costing us more to be married than if we were single, I think we should separate,’ ” he said. The couple eventually resolved their differences and decided to stay together.